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tv   Charlie Rose  PBS  October 22, 2010 11:30pm-12:30am EDT

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>> welcome to our program, tonight steve rattner writes abouhis experience and overhaul and insider's account of the obama ministrati's emergen rescuef the auto industry. >> i almost didn't take the jowhen i began to look at thproblem. because i sawhat seemed like an impossible pblem you had companies that were hemorrhaging a couple billion doars a month. you had massive excs liabilities. you had thewholproblem of the uaw that everybody's familiar with. you had market share declining, decling, declinin it wn't clear to me ther waa solution. >> and then michael eisner whose book is working together, exploring the powerful potential of successful partnerships. i would say the consistent theme throughout my book is trust that there wasn't envy against their partner. each group of partners
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wanted their partner to succeed. there was no i'm better than you. they were in the foxhole together when it was bad. they were out high fiving when it was good. you know, warren buffe can be playing the ukulele wit a spotlight on him an charlie mugner had no interest. very, very interesting. >> rose: steve rattner and michael eisner when we continue. >> funding for charlie rose was provided by the following. maybe you want to provide posumeals for the needy. or maybe you want to help when the unexpected happs. members prectwant to do, from american express
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n help you take the first step. vote, volunteer, or donate for the causes you believe in at take charge of making a difference. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. rattner is here. he was the leader of president obama's task force on restructuring the automobile industry in the wake of the financial cris. that effort becamehe largt government intervention in industrial america since world war ii. steve writes about this experience and more in
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"overhaul" an insider's account of the obama administration'smergcy reue othe autindury. i am pleased to ve him back on this program. he used to be the chairma of the board of channel 13, our sponsoring station here. he's a long time friend of mine. and supporter of this program. and i should say that you in fulldisclosure d mi deeply appreciatedive of the support of channel 13 and steve for this program. having said that, let's talk about you. >> yes, sir. >> rose: how did this job which lead to this book come about. >> it hafernt been a secret. when i lived in washington when i was with the times i really came to believe that public service and public policy were things that i would like to be volved with at some point in my career. and being an honest guy i would tell people that if they asked. so after the election, tim guidener and larry summers called me and asked if i wanted to do sething that lead to tim king me to
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come take the auto's job. >> rose: and what did they say your mission was? >> the mission was to fundamentally restructure these companies a way that they re going to be viable. they didn't want, and i wouldn't have taken the job f they had said let's put a band-aid on it and get through the next few yea and don't worry about aft that. they really were very coitteto fixing this problem once and for all. >> rose: and when you began to look at the problem, what did you see? >> i saw, in fact, i almost didn't take the job when i began to look at the prlem. because i saw a just what seemed like an impossible problem am you had companies that were hemorrhagg a couple billion dollars a nth. you had massive excess liabilities. you had the whole problem of uaw that everybody is fami wit you had markethare cling, declining, declining. it wasn't clear to me there was a solution. >> rose: and a different problem than general motor than there were at chrysler. >> they were almost mirror images. i didn't realize this until i got well into this project but they were almost mirro images. chrysler had a very weak product line. it didn't have a single car on consumer reports most recommended list. but it had a pretty scrappy
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management team. general motors actually had-- . >> rose: put in by private equity. >> bob nardelli from yen electric. general motors had actually not a bad suite of products, better than pple ve it crit f but as it came to learn it the the most dysfunctional management structure and team i had ever seen. e most incomtent finance stf, theost bureaucrac company it was really quite-- we were all dazzled by it when we first came to seit. >> rose: so you said to the president, or you said to the task force, we've got, the first thing we've got to do is get rid ofhe management of general mott sners. >> ibecame cle ver early onhat there had to be a management change. you'll remember that rick wagner flew, they flew on the three private jets in november of '08. re tn thhree private jets is rick basically-- . >> ros down to washington. >>or the congressional hearings. and rick said in a very succinct paragraph in this testimony, this is not our fault. we've done everything right. this is, you blame this on the uaw, bla it on oil price, bla is o the pane competition, but
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don't blame on management. there was no accepting the responsibility. and then in february they had to submit so-called viability repos fohow they were going to fix themselves with some help fr us. and the report was a completeenial, assuming car sas would cket back up, modest tweaks and things like that. and look, i come from private equity. and in private equity one the most important things is what management team a you backing. what management team are you putting your investors money behind. in this case it was taxpayers' money. and we concluded by mid-february this was not a management team that we would back with our money. >> rose: so what did you do then? >> we had a whole series of discussions with larry summers and tim geithner, ultimately rahm emanuel went to t president with a sees of recommendations. and interestingly enough nobody quarreled with our view about changing management at gm. it was almost not discussed. the toughest decision that we faced was whether to save chrysler which was a much more, as i said earlier, a much more marginal player. but the issue of whether to keep rick or not keep rick, ironically got no discussion. >> rose: how do you deal with a health-care system that they had, some people
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used to say that general motors was a health-care company and not a car company. and hodo you figure out, you know, what nd of demands are you going to make of the unions which have been so powerful? >>t's not just the unions. it's all the stakeholders. although to your point if you want an interesting factoid, general mors the larges pchaser of vili ra the-- viagra in the world because it covered under e union's cadillac health-care plan. >> rose: is at right. >> tru stement. >> rose: factoid for the da >>omething you can take to luncwith you. but look, we approached this like as investors. and we basically id if we're going to invest money in this company, what has to happen to make this company viable. the uaw was absolutely a big piece of the eation. but not the only piece there was too much debt there were too many dealers. a whole series of issues that had to be addressed and we essentially worked with gm to design a new business plan. >> rose: talk about some of the people you had working with us because one of the important people was someone who had real experience with the uaw.
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>> ron bloom-- . >> rose: a key member with you of the team because he clearly understood the union perspective and had their respect. >> slew-- he understood the union per specific. he worked for the steelworkers and thereas some rivalry. >> rose: i don't mean that particular union >> there was som rivalry with the uaw. but i knew nothing about cars. i knewothing aut the uaw. i needed people around m o did. and was lucky enough that ron was willing to come as my deputy because we need expertise and he had it. >> rose: and where is he today? >> he's in washington, in the treasury. he is the manufacturing czar for lack of a better wor overseeing both the auto wa, what is left of the auto investments but also trying to help deal with this massive problem we hef manufacturing in the future of america. >> rose: when you made the decisions you made, what was the nature ofour confence that is would work. >> we had apretty hi degree of confidence around gm to fix itself. the first important thing to know, i me out of th newspaper siness andou come around it, nothing is replacing the tomobile they may be electric, hydrogen powered or wind powered but people are going to buy 15 million plu cars
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in a year in this country because that is the nature of our socie it is n like the newspaper businesses where there are fuamental challenges going on. the only question is who is going to sell those 15 million carsment and we believed as you said and i said that gm had better products than people gave it credit for and if we could simply fix the liabilities, fix th cost structure and change the management, that they could be competitive. and in the first two quarters of this year, they had profsor t first time in 4 years. >> rose: now when you looked at this company with your own previous experience in private equity, at was what could have, what wld it cost to buy general motors, whether there was pausble r some private equi firm to come in there. >> there was no private equity firm that wanted it. >> rose: why not, because th wer terrified with the union ntracts? >> t whole, rember, this is mar of 2009. the world was collapsing. the stk market was heading to 0 there was no capital there was nothing. nobody knew where the botm was. nobody wanted to come in except us. and this is exactly why this
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was the right thing for government to do. because what is government exist for but for stepping when mkets fail. when there is afundamental good reason. >> rose: and supplier of last resort. >> and so we put a total of $50 billion intom but more importantly 30 billion in as part of the final restructuring and for which we got 60%, we the taxyers got 60% ofhe company. and e company going public hopefully on november 17th. and i think will be great success. >> rose: what does that mean for the amount of money that taxpayers put in. >> i think of the 50 billion that the taxpayers put into gm we will recover, well, right now there are bonds of old gm, i won't bother you with all the math that are trading that ily a recover of the government north of 40 billion. we will get most of that 50 billion back out of gm. >> re: chrysle as you said chrysler had been bought by private equity. >> so remember that daimler had bought chrysler say ten years earlier a had paid i think 30 or 35 billion dollars for this company. they, in effect, ran it into the ground. it became only a north american company that, the product platformas bare,
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cupboard was bare and you said they essentially gave it to private equity. right at the peak-- . >> re: right at the peak of the private equity mania. and it was just straight downhill from there car sales could lapsd. the company never had a chance it was overleveraged. it didn't have products. i think naelli tried as hard, is a real can-do guy t it never had a chance. it was just a matter every time. and this became the most hotly debated thing that we had to decide was whetr to save chrysler or not because there is a strong school of thought, why are we saving a we company with poor pructs. if wlet chrysler go, gm and ford would pick up most of their sales it would be ry good for gmnd ford. and whyut in anothe $8 billion into chrysler. and that was a fascinating discussion around the white house for many, many days. >> rose: give the dimension ofhe debate and scuson, which is in here. >> it was one of the most professional analytil debates that i witssneed in my pvate sector caer let alone what i imagined would happen when i got to government. everybody came to the table with very rational
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arguments. 9 people that wanted to let it go bankrupt essentially said, they were economists, serious people saying why are we saving a failing company. it will help gm and ford. the government shouldn't be propping up losers. it should be helping new companies and nner and they were right about all that. the other side of the argument were people like larry saying, if chrysler can be saved, pannedf it can be viable, if this moment in march when the economy is collapsing, the stock market is going to zero t would put 300,000 ople out of work in one y if we let chrysler go. evenhough some of those would be rehired later by ford ogm, the immedia impact would be very tough. and so whyhouldn't the government be saving chrysler it was a fascinating debate. rose: and you think you made the right decision in the end. >> i do. in retrospect i do. i was torn at the time. i was the last one to vote. i codn't make my mind. i thought both sides were completely right. and there is no dbt that gm and ford would be worth more today if we had let chrysler go. but as i look back at that moment when nobody knew where the bottom was and the economy felt like it was soluly in a freefall,
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and chrysler will work t will be viable, we will get paid back by chrysler i think we made theright decision. >>ose: and is now owned by fiat. >> it is in alliance. they have an ownershiptake an eventually they can get control but they only can go over 49% when the u.s. government has gotten repaid. >> re: wn you lookt chrysl there were hard cisis that had to be made. you had someecured lenders there, did you not. >> we did. >> rose: what kind of pressure did you bring to bear on them? >> there has been a lot of talk about this. and the answer is nothing more than what we would have done if we were in the prifert sector. i wento tim geithner and i said we have jp more an-- morgan and city group as the lead banks, they are-- tim said don't give them special concessions because they are tarp banks and don't ask anything special from them because they are tarp banks. you streat them the way would you treat them as i you were in the private sector and so jimmy lee who is the lead banker for jpmorgan they had 2 biion of the 6.9 billion of tol debt and i had the same kind of discussion. we had many times on wall
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street. >> rose: what s that discussion like. >> tt discussion was jimmy lee believing that the government would never let chrysler go. bankrupt or out of business and thate could get his full 6.9 billion back. and so until the day the president oke mah 30th, until theorning the president spoke, jimmy called me a couple times a week and said i want my 6.9 billion dollars and not a penny less that was his phrase. and then he had some phrase, i love jimmy he had some phras li you know en u lend somody 6. llio you eect to get it all back. i said jimmy, you know, not every loan you have made has been great. the moment the psident spoke i was literally still in the wte house, and my cell phone ran and it was jimmy saying when can we ta. and thisas when the president said h was epared to t chsler go ouof bines if the lenders and the other constituents did not come to terms. and i said jim you told me there was nothing to talk about. i will not give you 6.9 billion dollars. you said it was that or nothing. he said tif that wa before the president spoke. i di't know how important this was to the president but now i do and i want to be constructive. the point was that jim, the threat of bankruptcy and
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liquidation got jimmy to accept reality. e reality was that if chrysler had liqdated out of that 6.9 billion dollars, the lender was to the have gotten more than a billion. jilly would say the same thing to youf heere sitting here. we ultimately gave them 2 billion. they did better. >> rose: 2 billi on a debt of how much. >> 6.9 billion. they got abo 30 cents on the dollar but they would have gotten5 nts o the dollar if chrysler liquidated. >> rose: did it set a precedent that bothered you? >> what boered me in retrospect and this i will take a fair amount of blame for, in the president's speech on march 31st, march 30th, exse m he singled out some of the banks that had bee recalcitrant. jimmy was constructive. the speech on april 30th. he singled out the banks that had been recalcitrant and i didn't anticipate the exnt to whicthatould send a message twall street which was already feeling a lot of heatrom washington. so i don't, i think the outcome was right. >> rose: the msage was? >>that h attacked speculators that the obama administration was anti-business, anti-wall street. that kinof a message.
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we wer't a the president ist. but in retrospect we could have delivered that message a little bit more, slightly more low k fhion. >> rose: to the large -- larger question, this administration who you rked for, and the business community where you have prospered, what's happened? >> what's happened, i think, is that the country is angry. the country is frustrated. you just, you have spoken about this to many of yo other guests. there's 9.5% unemployment. the average workers wages are going down, not up. and at the same time people see business and the banks still making good profits. still making large bonuses. and there's just an ormous amount of anger and frustration, i think in this country. and i think the president who i don't believe an-business, is in a sense has a foot in each camp. he can't just take the side of one or the other. he is trying to bring the two sides together and wall street just doesn't always feel that anybody in washington appriatethem. and flip side is the people
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in whington don't appreciate that wall street, don't believe that wall street understands the mood of the country i we and spoken frt of a hedge fund not too long ago and i tried to make some of these points and i got booed. i gotwood. when i talkedabout dk --. >> rose: i remember that. >> when i talked aboutow 30,000 people inhis country get 6% ofthe total income iinn th krirk e hight ever in r history, somebody booed me and i wrote a piece for the journal about it saying you guys don't get it. it may be right t may be wron t pretend that it's all fine and this is grea for america. you're going to eventually slit your n thats because the country will come down on you. >> rose: do you think that the president has adopted populous rhetoric to the extremthat he shouldn't have? >> i think he has adopted it to some degree because this is just the real world. and you have to, he is a politician. he ianelected ofcial. he has to understand the mood of the country. and this is the mood of the country. but he famously said and the bank eschs don't like to be remied of this, when he had the bankers in in '09 and they were beating up on him. they said look, you don't get t i'm the only thi standing beside you and the
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pitchfork. that is what they don't get. i do not believe he is anti-busines i know larry summers an tim geiter are not anti-business. >> rose: speak to this impression by some that he is of a philosophicalind that govnment interventio is a good idea and that his preferences for some governing social democrat european style model. >> completely wrong. iny vw. >> rose: you have worked with him and talked to him about philosophy and you were on the cutting edge of one of the things that mit lead someone to think that. and it wa noa moment when the president urged to us do any more than we had to do. we were draft mood this war. we didn't volunteer for it. he never wanted to go into detroit or go into these auto companies or do any of this stuff. it was thing wes had to do to preve theconomy from coullachesing and onof of t this that we did that has not gotten a lot of attention but relates to gm's ipo was, and this was lay summer's instigation and the presiden was completely on board for it, we set down a set of principless called the u.s.
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government, a shareholder as to how quickly the government was going to get out. we wanted this to be, larry suers particularly deserves an enormous amount of credit. he wanted this to be the opposite of vietnam. we were going get in and out quickly. he didn't want to be the a minute longer because larry knew that there would be an enormous temptation for the government to go into other sectors. and the whole concept of this european style of industrial policy is enate ma i believe to oureconomic leaders in washington, i lieve that. >> rose: how would you define this president in terms of listening to all the rhetoric from the tea party or from republicans or ian people on the left and right regardless of party. in terms of how you sis essentialhilosophy about government, the private sector,. >> i would define the president as being very much like bill clinton, very much a centrist and i would argue r that by looking at the people he picked. tim geithner, larry summers, rahm emanuel, hillary clinton, bob gates, i mean ese e ve ntri,
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seibleeopland i think the president dle delib-- very deliberately didn't pick people further out thedge because there is what he is comfortable with. having said that he, i think would say, i would say, that in a different world than the 0s. people have to uerstand the mood of the country. and i is not fundamentally a private sector guy. and he is, i think, more attuned to the mood of the people than perhaps the mood of the business community. i think that's fine. >> rose: but that's one the crit zuchls, he is not in tune with the mood of the people that is part of it, and somehow the narrative got lost and he hasn't done very good job in understanding their apprehensions. >> yes, i get that and i think he gets that. but remember, he's trying to pre a kind of alternative case which is a very hard argument to make. >> rose: things would have been worse without. >> that is his argue. th if we hadn't saved the auto companies, if we hadn't done the things for the financial sector, if we hadn't passed the stimulus program the country would be in a much woe ple. i believe that fundamentally but it is a hard argument to make to the country when there is 9.6% unemployment. >> rose: what is your philosop on e bu tax cuts.
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>> i think that the bush tax cuts forhe wealthies people should absolutely be allowed to expire. all it would do would be to take the tax rates back to the me level the were at under clinton which would be almost the low nest history. >> rose: if they expire ty go back to that. >> exactly. the is no argument for why they should continue in my opinion. i don't buy theargument that the economy is so ak that you have to maintain these tax cuts for this top 2% of the country. i think you could take that money and do other things for the country like frasuctu andothe kis of stimuluhat would be better for the country than giving it to very wealthy people who are just simply going add it to their bank account and not reay do anything witht. anthat would be my view. and i think in due course, we will unfortunately have to address the rest of the bush t cutsecause we are onn unsustaable fisca pa as you he certainly talked about a lot on the show. >> rose: and in fact, so we will wait for the report of the bipartisan commission. >> yeah. and we are are also more importantly frankly that is a report. what we are really waiting for is the result of the election and between now and the end of the year as you pointed out congress has to do something because otherwise l the tax cuts expire, so it force congress
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to actually do something in the lame duck session. >> rose: you went from journalism to finance. and now from finance you have an opportunity to look at government. tell me what you learned abougovernment that u might notave known. >> leaed two things. were wera little offsetting. one s i d no idea of the re pow of government. when would call up somebody that i had to deal with and say i was calling from the u.s. trsury, it was unbelievably difrent conversation than when i was calling from the quad rangel group or lazard freres or morgan stanleyment i just didn't realize how, especially in this environment, the people respond to the goverent. the flip side is i also saw e downse which is how unbelievably hard it is to get something done. if we had not had tarp available to us, and if we had had to deal withhe feral reserve and the f.d.i.c. the way my colleagues who work worked on banks had to i don't know we could have de whate did. we were in a blessed uniqu position that we had supportive bosses, access to tarp and we were off in the basement of treasury and peop let us do our thing.
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my colleagues o woed on other proble, teheir hair out. congress truly is dysfunctional. congress was worse than i ever imaginefr any of the me i spe in washingt or any ofhe peop i er snt time with. and if the public in this country wants to one good thing it should be to elect people of whateveparty who are there really to do the business of the people and not to pursue these-- look, the autos, the only time congress got involved, was over dealers, of all the issues in 2009 that this country was plagued with, that congress devoted incredible amount of its time and emotion to saving a bunch of dealers who should have gone out of business was crazy. >> rose: gave them an exemption or something. >> they passed allow forcing the chrysler and gm to go through whole arbrati process and take ba a bunch that had no business being in business. >> dow believe the country's ready for an independent presidential can dat-- candidate in. >> as u know, you made your full disclosure. mine is that i'm close to mayor bloomberg and would support him for anything he chose to do in his life and wod love nothing better than to see him as president. and thin the mood of the
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country maybe partly there but i think the structure of the political process makes it impossible. there is no way that you can belected toughne of th existing parties. and i'm not sure you can be ected around them. first of all among other things you have the elratol coege and if you dot get 270 electoral votes it goes to the house of representatives where this third party candidate s no representatives at l. they arell democrats and republicans so what is the chance that they will pick him. so it is a wonderful thing to think about. and it's wonderful to think abt the mayor, but ion't see hoit hapns a neither es he. >> rose: and then there is you and the problems that you have had. >> yes. >> rose: speak to the issues that, give us a sense of looking at it from where you are. in which you have the sec. you have the attorney neraraising serious questions about what might have taken place in raising money for, from pension funds for private uity firm. >> i wish i could talk about that in detail because i've lived with this for a while. as i write in the book i have been in businesfor5
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years. i have never before had my integrity questioned. i have had a lot of people crit sides me foone thing or anoer but not for fundamental hosty. than has been as i say if the book the most painful episode of my professional career and when the time is rit i hope will you have me bk and lete tk about it but unfortunately my lawyers for the moment have said i am really-- . >> rose: so wh is the impediment from the lawyers to speaking about it so tha you ca speak to both the issue as well as the agony. >> i-- the impediment is essentially some resolution or some-- rememr, nothing has happened. nothing has happened. i havenot actually been totally charged with anything. i haven't been convicted of ythi. i ven' settlednything. sos we sit he today we're dealing with just a lot of press stuff and i'm not saying thereren't serious issues here, the are. but until theyre resold up or down, either i get sued or i settle or there is some outcome, any smart lawyer is going toell any smart client y would you start talking publicly about this until we figured out where wean get to with your adversaries.
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>>ose:here is al thi you continue as an advisor in a relationsp with the mayor. >> yes. >> rose: so that continues. >> the mayor, look. >> rose: go ahead. >> as i say in the book, i was blessed by having the support of a lot of friends, yourself included during thisment but never in my life have i seen anybody like the mayor. he his compa of loyalty, friendship and cert future-- certitude is just unwaivering and the first moment this iss came up until two da ago, including this moment, he has been nothing but there. and he has said steve, whater is your private business is your private business. i trust you completely. i value what you are doing for me. and just keep doing. >> ros i hope will you me back at whatever te you can talk about all those issues. it is extraordinary. it has been an extraordinary what, 18 month >> it has been both the best and the most difficult period of my professiona life. >> rose: are you taking notes? >> i already wrote my book. >> rose: there's mor >> there's anoer book. >> rose:hank you vy much. >> thanks for having m
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>> rose: the book is called overhaul, an insider's account of the obama administration's emerncy rescue of the au industry. >> michael eisner is here, he has built a remkable care in mia and entertain. he was chairman & ceo of the walt disney co. for two decades. he built it into an0 billion .re in 2005 he started an investment firmhich launched a digital studio for guru. he has attributed a great deal of success to his ability to build and maintain strong relationships. therefore his new book is called working together t explores the powerful potential of partnerships. i am pleased to have michael eisner back at this table. welcome. >> thank you. >> rose: so why this now? my great question. and the subtitle, why great rtnerships succeed. >> well, hi a great partnership. and i was-- . >>ose: talk aboutecau
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he is an amazg man. >> when i went to disney and i went with frank wells who had been the head of warner others. he left warner brothers to climb the seven highest summits in the world. did not accomplish the everest because somebodywas killed on that last adnture. cameack. got involved with disney. brought me in. ended up that we were both going to be partners. and he said that he wanted to be number two. now he said he wanted to be number t because i s a little pushy, iuess, and i had a pretty good job at the time. i was working with barry diller and i said why do i want to go from bng nuer two with barry to being number, equal and frankaid you are right. i'm number two, y're number one. and that moment realized, this was a selfless man. and we had a fantastic partnership. it was one of trust, as i write in the book, everybody
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thought that i was the so-called creative one, the crazy one and he was the rode scholar, standford graduate, straight laced, suit oriented, executive. >> rose: not true. no it was some what t reverse. he was a little wyler than i was. i think when sid bass who was a g investor in the walt disney co.was ask recently was chae crazy and frank straighter. and sid said nobody, they were both crazy. soeere crazynd not crazy. we had this great relationship. he was unfortunately he died in a helicopter cident a decade into our arrangement. but i never ha an arrangement like this. i was never happyer at my job. he was-- he watched pie back, he was so enthusiastic. he was, you kw, if i would suggest a ride or an actor in a movie or broadway show, he was the first one to jump up and down and cheer. i never had anybody other than my wife, which i
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important because it's also a very strong relationship, that i felt so comfortable. i had a very good latiship with barry ller i work witim ataramnt, for eight yes. i worked with him at abc for eighyears. and we had a ve strong relatiship. a little different. we were younger. we were more competitive against each other, although we always respected each other. and it worked great because we had diveing capabilities. he was very talented and i wasn't,. >> rose: how would you characterized difference beeen the two of you. >> between me and barry? >> rose: yeah. >> he's more cynical, more studied,maybe a little mor nservative. i'm more hey, let's go put on a show. i'm more impulsive. he would alway say to me, a little bit like charlie nger says t warren buffett, h reay thought this thing through are you about to jump off a clf.
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and then i would convince him and then sometimes he would haven idea that i felt was pain too esoteric, above the head of the audience a we talk me into it. so we were number one almost every yearoth in televion and mies. by our inyang back and forth creatively. and he was eye tough guy, is a tough guy toferb else. he was a tough guy to me. so i became the moth at paramount. everybody came to me to compin about barry. and then i would go to barry and say now barry, you got to say hello to this person. you can't dismiss them and wasn't tt stupid an id. and he would say yes. and when i went to disney, my roles kind reversed. i became theough guy. and the crazier guy. >> rose: and. >> frank became kind of the mother of the company. soe ha thiselationship. i had these two great relationships and a wife as a partner. and i had beento a conference which you may
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have been at. it was the aspen ideas festival and i saw a prestation about happiness, d itas i the atlantic monthly. and it was what mes men predom-- predomintly because it was a harvard longitudinal study that started in the class of jack ken dee, his file happens t be sealed in020. but everybody was out and every five years they did physicals. they did psychological tests. this went on for 70 years. it started with wd grant, wt grant asking harvard to do this, to find store managers. and after a dece, harvard said you know what, let's do it in another win, in a bigger way. and after year t ncluon was very simple. of all the stuff they studied it is not exercise. it's not die it's not wealth. a sustained relationship
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with an individual good, bad or indifferent, either a marriage or a business partnership or a long period of time. that was number one. number two was staying in touch with your siblings. and number three was bestowing information on the next generation. so i heard this presentation. hi my relationships with barry diller and with frank wells. i had met lot of the people i write about like warren buffett and charlie munger. i know that warren has unbelievable respect for charli and once asd him about doing a book like this. he jumped up and said you have to do. i'll be your ant. i'll get it done. charlie has never gotten the kind of credit he deserves. i want to you do this. and then i was watching your show. and i'm not sang this because i'm on your show. have said it many times valentino a john carly giammetti were there and you were interviewing em. >> rose: were here. >> were here, sorry, at this table.
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ani think i met them once, twice as a party or something over the years. i didn't know either of them. and watched this interview, d then i went to look at the movie, the last emerer. and was a love story. it was a 50 year love story of two people that came gether where one nd of t if theackground b made it all happen. and valentino, the thee at call frontman was the creative force, but john carlo was without him there was no-- was no -- >>. >> rose: he wasn't doning with when he me to him. >> and the movie starts off at t award in france which you just got as well. and at the movie, finally after 50 years, you watch this thing, you watch the close-ups. and valentino finally thanks
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his associate of 50 years. and they all start crying. and i turn to my wife and saidkay,i've got to do this book onpartnerships. i got to get it i got to meet these people. and then i went around to these ten people, ten different partnerships and i intervied them endilessly. i worked with aaron cohen, i worked with on another book called can't. i spent hours, i got spellbound in the washington d.c. airport with warren buffett. i went to france to a chateau to talk to valentino. i went to montana to talk to e of the partners of home depot who started it. i was everywhere. in learning about what makes it work. and what is it about. >> rose: and what did they tell you f they togher collectively cld say at makes a relionsp work, what wld they say? or what did they say? >> i woulday t consistent theme throughou my book is trust that there
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wasn't envy against their partner. each group of partners wanted their partner to succeed. there waso i'm better than you. they were in theoxhole together when it was bad. they were high fiving when it was good. you know, warren buffett can be playing the ulele and with a spotlig on him and charlie munger had no interest. very, very ieresting. you know, i did joe torre and don zimmer. don zimmer being the bench coach. joe torre being the manager of the yankees for four world series wins. don zimmer was the joe torre, little bit like charlie is to warren buffett. a little t like jean carlo geomet syto valentino. a partner and you an essential partner, one loved the spotlight. one didn't love it so much. i talk also a little bit about partnership has that didn'tork.
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st like marriages that don't wo. and every once in a while you get into a partnership that is just doomed. >> rose: and if it doesn't work, why doesn't itork. >> i had one that didn't work. >> rose:ichael o. >> ias determined never to talk abo it but here i am drawn by you. >> rose: yes so, why didn't it work? >> i think it didn't work and warren buffett told me this later. i think he inks he told me up front and he may have, i think he told it to me later. because i think if he told me up front i would have stened to him. but that is history he said look, history, look at charlie and me. i'm a ham. i love the spotlight. i loveeing on the cover of fortune. i like being the one they talk to. charlie doesn't. now you are going into business with michael ovitz. are you abouting toill each other trying to get into the spotlight. and there's only roop for one. so that was probably may some of the reason it didn't work. we were two competitive. >> rose: but you knew, you had told me you knew it day one. day two, day three.
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>> well, hi an operation i had i bypa operationment we had just bought capital cities/abc for $19 billion. my wife wanted me to live. she is a partner an she convinced me that this was the peonho cldelieve me of singly ane runni 5,00peop. and was a mistake. it just was a mistake. it was, and that happens. ere are some ople, you kn, don't meld. i melded perfectly with my wife, perfectly with barry diller. perfectly with fnk wells. rreneldserfectly with charlie munger, john angell owe in finance melds perfectly with michael gordon. >> rose: melinda gates and bill gates, tell mabou that >> thats with a great interview. because first of all, the product of their partnershi
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are eir children. so that's a great accomplishment to begin with. and now they have this rather lge philanthropic foundation for which warren buffett is also, and you interviewed all of theon this subje, put a lot of funds to. and she said to me, it was interesting in the beginning i would go to a meeting with a prime minister, with bill, or whatever. and i was the wife. i was irrelevant. and i understood that. you know bill was this bigger than life character, started the biggest computer company in theorld, richt man in the world all that she said after three minus i was ual. and bill let me be equal and my intelligence let me be equal and n ts togeth. and bill gates is an interesting guy. he has had-- he is a partner kind of guy. his father was hi ptner and really supported him. he had a partnership with paul allen as we all know.
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>> re: h relatnship with his mother is deep and profound. >> exactly. two other people other than pa allen both of whom are no longer alive were part of that original partnership. he then determined to have a partner with steve bomber at microsoft but the big partnership in his life honestly is with his wife. and i think it would be hard to be in business with your wife. children are enough, they are living. he hashese two things that are in there every day with them. and they have it in sim patrickeau and there is no gel osee you know, bill very competitive. and i have seen the competition and if you don't use microsoft as an operating system, you will let you know and no uncertain words. in his early youth he sufferedools, as i have read, not great, he had a short attention span and short temper. and he has matured in to
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being a great partner. if somebody like that who is almost a sole practitioner moved into understandingow important partnerships is from his youth and from his marriage, it's obviously a. >> rose: they are really on this philanthropic journey together roll tape, bill gates and melinda gates, melinda lkinabout rtnerships >> when either one of us becomes a little irritated impatienthat something's to t goi fastnough or you kno not cessily with each other t wheverver it is we are trying to do, we'll come back to that and say well, wherever we're going, we're going together. and it just is a way of saying to each other, you know, we're on this journey tother. and all the things that we're learning. i just can't tell you how, wh, you knowi will come back from the developing world, its first person i want to talk to and the first person that wants to talk to me is bismt he wants to hear what i have learned, hear whai am excited about. i want to tell him what i am excited about it, tell him what i saw, tell him what
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isn't going as well as we thought. and same tng when h comes back from northern nigeria he wants to tell me what he sain pollio, what did he learn from the leaders what will be hard, how did we think about this. to be doing that together is both satisfying, but to be working on something that you are so deeply passionate about, and that uses every piece of your mind and your heart, it does, it gives us both great joy together. >>ose:et me talk about the media business for a few minutes. what has been the hardest thing for you in adjusting to not being the c.e.o. of the disney company? >> oh, i guess ther are rtain aces in the worl th i can't get table at a restaurant. >> rose: no, come on. >> no, i'm saying, i sat for 40 years in a public company wi a magnifying glass on everhing did. and my cldresat for their lifetim with being ded abou mickey mouse. i am now in sittion where i am doing a lot of things and i'm pretty free
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and clear to dwhat i want. obviously-- . >> rose: are you as happy as you were when you were ruing the walt disney co.? >> well, younow, i'm a happy pefernlt i mean i-- i walk out of-- i came out of a bypass operation and i was like hey, what's up today. i just not that kind of person. >> rose: what is the biggest misconception about you? >> you read all the stuff they write about you. >> well, mosteople think i'm shorter-- taller than i appear. >> rose: go on, stop. at is it? >> i wouldsay that the number one misconception about me when i speak is my god. -- my god,ou have sense of humor. we thought you were a straight laced, keli tou ass corporate executive. and they say i didn't know you had a sense of humor. so that is the first thing. yoknow, mosthing were written about me overy career have been very flattering. there was a period of time at the end of my stay where a couple of extremely, in my opinion, mediocre people were having to be restraid
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me and the restrain on me caused a lot of dissension. >>ose: jeffrey katnberg. >>o, neffee tzenberg. definitely not talking about sqef ree katzenber >> rose:re saying that because the was a lawsuit. >> n no, no, let me expln jeffrey katzenberg as long as we have this platform. he and i were partnerfor eight years. >> rose: and de a hell of a job for you. >> he did. and we were very closed. and there came time when frank wells died that he thought he should be the president of the company. of the walt disney co.. and i did not. i mayave been wrong. >> rose: why didn't you think he should be president? >> i just thought he wasn't ready. i just didn't think he was the right pers at the time. i didn't say i was right. i think i was right. he was alsoight that the timewas,t was a time fo him to do something, if not the president of disney, go out and do something ee. that caus a friction that lasted for a while. but i feel-- .
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>> rose: why did he win $20 pl mlion colors from the walt disney company in a lawsuit? >> because i didn't think, as i made the deal and read the contract, i didn't think he deserved it. as he read the deal and made the contracts he thought he did and he preiled. that t system. probably would have been smarter for me on a pr basis. >> rose: beyond that you could have settled this thing for how much. >> no, it-- he got what he serv. and maybe we could have ttled it for few dollars less. that wasn't the point. we could haveettled it not on the front page of the "nework times" that really is the point. >> rose: heris the oth int out you. i mean look at what you did for the wt diey co. is evident. what it gave you is evident in ter of your own percentage of that company which continues to be a great company. many people believe if was never the same after frank wells died. never the same. >> well, i don't know if
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that's true. >> rose: you have obviously thought about it because -- >> the fix decade after he died we bough capital cities/abc. madthree of the biggest movies in animation in the history of the company, and our growth of the company doubled. so the companydid extremely well in that next decade. we hit a slightwall and some conflict in t last coupleof years. i didn't want to pay for pixar what steve jobs wanted me to pay for pixar and whether i was right or wrong will be in the stars down the road. so far i was wrong becse they have done the impossible. they keep making unbelievably good movies so bob-- did e rit thing. >> re: he had betr relationship with steve than you did. >> no, if you say yes to receive you have a very good relationship with steve. if are you determining your relationship by your agreement wi him, fine hi a very good relationship with steve until i said no, i won't pay that amount of money. so that is not t iue. bob wanted peace in the kingdom. bob wanted an absolute faith
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that they uld continue with joh willitr making movies of that quality and they have. >> rose: and he was right. >> and i felt that walt disney didn't me that many movi in a row that were hits. steven spielberg dn'take that many movies in a row that werhits. the average domestic box office were 400 to 500 million per movie to pay for it and they were so far. so he was right. and god bless him because he brought peace and a tranquillity to the post michael eisner era. am i happy with the way the disney company is performing, yes. am i happy the way we performed? all thos years or the year i ran paramou or the year i ran abc, yes. what i do think about when i think about it. i ink about partnership. which is why i wrote the book. and by the way, if you look at the human being or you look at relationships, and we maybe coming to the end of this so you i don't want to go over, but there is a chagall painted often a horse and a man. and often had he eorse
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gigantic a this little tiny man. and the man couldn't ride the horse. and often had he h little tiny hor and this git n anthe horse cldn' get up. and the bottom line is you have to have, the man representing intelligence, the horse representing emotion and animal, if you will. you have to be in sim pat . d i think rtnerships he you be in sympatico, help you keep an ethic direction. we neverad an ethical oblem. any company that barry dill and i ran or frank wells and i ran, ever. because we would always remind ourselves, when are you alone, and you can't walk past the mirror, and you think you are pretty hot stuff, and you believe the press and you get very arrogant, and you believe the lawyers and the accountants saying you can do ithis way, pretty soon you start going over the line. and that's what happened in the early part of this century. is everybody started to believe their own propaganda. and they started to get arrogant and crazy.
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with people that are in partnerships, when it was and lo, gordon, warren or bill or any of those people, they did not go over the line. and when you have a person sang to you areou being an idiot, don't do that, or do this, it really is helpful. and by the way-- . >> rose: but did you have anybody say that to you after frank wells died? s on oh, yeah, yeah, yeah. >> rose: other than jane. >> one, my wife, very good point. two i think i he it inside me after allhese years. three, i have people around me who were trained by all of us but evebody who is a sole practitioner can go off the rails. but you really stay on the rails with partnerships. and they don't teach it you kn, you have kids. and the kids when they are little in kindergarten, share, share, share the toy, don't eat the toy, be nice to your brother. get to aut fifth grade, kill the kid. be number one. get to number one on the sat. if they started teaching partnership and working together, in school,
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colleges and business schools, i think we would have a more steady and growth-oriented under an ethical basis than we do today. >> rose: what is the most important thing y have learned or, and learned about yourself since you have left the walt disney co. that you wishou knew earlr. >> well, honestly. >> yes. >> reduce the amount of high t food you eat. >> right. >> exercise a lot. >> right. i started that about a decade ago. i stted that in my 20s, i woulhave never had a heart problem. so that's probably the most important thing i learned. i have learned how much i like being a grandparent, particularly my wife likes being a grand parent lik it too, i like it when they get out of the diapers but she likes it right from day one. i love beingable to watch bob eiger and disney and watch time warner and watch
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fr theutside and not have to worry about the day-to-day. you know 125,000 people that work for you ery day is issu i usedo go to bed at night with 10 scripts by my bed, always, it was always the day beforehe fal exam for me i alwaysad 20 phonealls unreturned. that is a lot of pressure. so i'm kind of einoyg not pressure iuess i could have, i could have ndled about three or four situations better, public situations and hundreds of private situations, obviously. but i think b and large i'm pleased with the three companies that i worked at all went from the bottom to the top. and that's gratifying. people forget that. i remind myself. >> abc, paramountnd disney. >> abc, paramount was, you know. >> there was real opposition to bob iger succeedg and u really me the case for him. i doubt that he would have
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gotten that job whout michael eisner's push. >> he had two votes in the beginning. me and bob on the board. everybody else was against it. because everybody else to the because of anything negative about bob, but becausthis was the height of enron,overnance, all that stuffn even thoughe operated totally abo board and they wanted to bring in all these candidates and go through that whole process. and i saidfrom day one, you' got the g rig re. he spent tenyears working with me. he understands now disney, animatio all that stuff. he certainly understds sports which is important because of espn, and television because he came out of there. he came out of sporsand televisi. hean abc. he took abc to number one. after i left. i had takeito number one then it nt down andhen he tk itack. he was absolutely the right candidate, with the right temperment at the right time. and by the time we came the final vote it was
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unanimous. >> rose: you made the case. >> but it wasn't a hard case to make t was obvious. >> rose: what happened to david westin. i don't know. >> rose: you don't know? >> no, i don't know. >> rose: you don't know anything about that? >> well, i have a-- i have a telephone. >> rose: and so therefore -- >> david, i will tell you what david said to me. david said to me he had been doing it for a lo time. he was lookin to t new things. he-- that is a hard job day to at this da an bob said to me, who loved dav, you know, wh i was there bob and david were a team. bob really was the person at disney that news reported to, not . i mean talked toob. so he really was, bob reay was e architect o picking david and nurturing david. and i think bob is fairly disappoint that he is not in his life at news. but i think he accepted the fact that david i don't know if the wd burned out, or looking for other stuff. i don't think it was
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a-- there's less here than meets the eyement i don't think this is a giant issue. >> there is no story behind the story. >> i don't think so. but you know what, i'm wl tellou what i know. >> rose: michael eisner, the book is called working together y great partnerships succeed there is real wisdom in this idea that partnerships can make a great deal of difference. the one thing that i have discovered about partnerships is that you have to understand the nature as yosaid earlier of the partner that were involved with, engaged with, any kind of partnership. you have to understand and not try to make them into something that they are not. >> every intervi i he done with you, you have been obsessed by partnerships. >> rose: yes. >> you have asked me about me and barry and you ask me out other people en we're not on cama. and i think you're looking for a partner that is the way iook att. >> re: thank y. >> thank you. >> rose: thank you for joininus. see you next time.
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>> funding for charlie rose has been provided by the coca-cola company, supporting this program since 2002. >> and arican express, additiona funding provided by these funders. and by bloomberg, a pvider of multimedia news and information services worldwide
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